Licensing of Homestays: Easy process will enhance long-term growth potential of a new category in India Tourism | The Financial Express

Licensing of Homestays: Easy process will enhance long-term growth potential of a new category in India Tourism

Despite government efforts to aid licensing, there are still a large number of unlicensed homestays in India.

Licensing of Homestays: Easy process will enhance long-term growth potential of a new category in India Tourism
Licensing of the homestay industry is a dual structure. Either at the State level or at the Central under the Incredible India scheme.

By Ramit Sethi,

The Hospitality Industry took a battering due to the Pandemic but the one thing that emerged thriving from it was a new niche segment; the Homestay Segment! Given the current world scenario, India could see a significant increase in tourists (domestic and international), yet there isn’t enough accommodation for them. According to an ACMA report, stating a survey by the Ministry of Tourism, there are 2 lakh fewer hotel rooms available for tourists in India. Another more recent Noesis 2022 report stated a shortage of as many as 2.5 million rooms in the homestay segment, catering to potential growing foreign tourist arrivals. For any flourishing travel and hospitality industry, homestays hold significance not just as affordable lodging options, but — and especially for our country — carriers of the Indian ethos of warm and home-like hospitality. The issue of licensing is a crucial one that governs and regulates this arm of hospitality.

The issues and need for licensing homestays

Licensing of the homestay industry is a dual structure. Either at the State level or at the Central under the Incredible India scheme. It is sometimes an online process and sometimes requires a personal visit. Despite government efforts to aid licensing, there are still a large number of unlicensed homestays in India. To help with some context a recent news report on Goa’s homestays stated that as many as 70% of total homestays and hotels are unlicensed. This not only hampers a valuable revenue source for the Govt. but also deeply affects the overall guest experience. Having licensed and unlicensed homestay’s/ B&B running simultaneously is not good for the overall industry, not just in term of compliance but also inconsistent guest experience.

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We attempt to provide a service to homeowners to open their beautiful iconic homes to tourists which is fully compliant with licensing requirements. Our operating model helps redesign a home to suit the increasing needs of the tourist, implementing a professional booking system, great food and experience, high-quality interiors, and maintenance. This is beneficial to both Landlord/ Property Owners and Guests demanding consistent quality from a “Branded Homestay”. This today, is fast becoming an alternative to Branded Hotel stays. This process requires all our properties to be correctly licensed, compliant, and run to consistent standards.

The impact and models for licensing

Being a Licensed homestay creates a regular impact in the sector. According to an ACRA 2020 report, most governments sought to extend the following advantages through various schemes: incentives, subsidies, and tax breaks. The most prevalent are room construction subsidies, exemption from luxury taxes, domestic electricity rates, and exemption from land conversion charges. Apart from this, arranging training for skill development, listing on government websites, assisting with online payment alternatives, and so on were among the additional benefits announced by state governments.

The Travel Agents Association of India (TAAI) has encouraged the federal government to examine the ‘homestay’ model used by the Uttarakhand government for other states, claiming that the move might assist in jump-starting the economy as well as enhancing tourism. The Uttarakhand government intends to increase the state’s economy and tourist industry through homestays, which are being developed in offbeat and remote villages as well. So far, over 3,600 homestays have been registered, employing approximately 8,000 people, according to TAAI. We feel that the indirect boost to the community is significant in remote areas in terms of purchasing local groceries/ services/ equipment, laundry, taxes, utility payments, and above all employment of staff in this sector.

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Homestay classification is also slowly being made easier in some states. For example, Kerala Tourism (KT) is revising its criteria to define and simplify homestays to guarantee that all homestays register with the agency. According to Sandhya Haridas, Assistant Director of the Central Agency, homestay operators can also register with the Union Ministry of Tourism and be classed based on a set of rules that includes a 38-point checklist. It has been learned that a few proprietors are eager to register with both the State and Central tourist authorities in order to increase brand value and sometimes overcome barriers like higher tariff charges, restrictions on the number of rooms in a homestay, and the presence of the owner in the homestay premises.

According to a recent government ruling, a no-objection certificate (NOC) from local bodies is no longer necessary to operate homestays in Kerala. According to a statement by Kerala Tourism Minister P A Mohammed Riyas’, the government made the critical decision after considering the long-standing desire of guesthouse owners and business people in the state.

In Conclusion

A portion of the population’s rising disposable income, increased use of social media and the internet, and improved access to remote areas all contributed to the improvement of India’s tourist prospects. As an alternative lodging option, homestays have already become a significant component of India’s tourist industry. Their access to online travel agencies (OTAs) has improved their possibilities for growth and expanded their reach internationally. Both basic as well as more up-market “Branded Homestays” can blossom and flourish together and contribute to the tourism industry together since there is clearly enough room for all with incredible opportunities for growth.

(The author is Founder of Seclude. Views expressed are personal and do not reflect the official position or policy of the FinancialExpress.com.)

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